The average cost of full-time childcare is £385 a month, but this rises to £729 for children under two, says Aviva. Photograph: Photofusion Picture Library/Al/Alamy

The high cost of childcare and commuting is forcing women to give up their jobs to avoid ending up out of pocket, according to new research.

The study says the number of women opting to look after their children instead of doing paid employment has risen by 32,000 since last summer, with rising childcare costs being a key factor in their decision. The figures are based on analysis of the latest ONS Labour Force Survey, and the number of women classing themselves as economically inactive because they are looking after their family and home.

According to the insurer Aviva's latest Family Finances Report, the average cost of full-time childcare is £385 a month, but this rises to £729 for children under two. Part-time care comes in at £193 a month, or £364 for the under-twos.

On top of this, the average worker is spending £120 (full-time) and £90 (part-time) on expenses associated with their jobs, such as clothes, travel and food, and £147 on school-related costs. After meeting these costs, Aviva said a woman in a relationship on the average part-time salary of £8,557, after tax and national insurance, with children aged one and seven would be losing £98 a month.

In contrast, a woman in a similar position who does not pay for childcare will take home £402 a month once work costs are taken into account. According to the insurer's research, 54% of families say they are not currently paying for childcare.

Full-time workers are better off, but only just. A woman with a one-year-old and seven-year-old who earns £17,513 after tax will have £120 left if she does pay for childcare, If she does not have to meet childcare costs, she will have £1,118.

The report acknowledges the figures do not take into account non-financial benefits of working. "Many people – parents in particular – report further reasons for working, such as the social interaction and mental stimulation it brings," it says. "The question of whether to work becomes even more difficult if people genuinely enjoy their jobs and want to work, but find themselves just breaking even – or even financially worse off – if their childcare costs are beyond their income."

It also warns that moving from two incomes to one can leave families exposed to potential problems. Louise Colley, head of protection at Aviva, said: "As care costs rise, it's quite possible we will see more and more couples relying on one salary while the other person looks after the children – simply because they may actually be worse off if both people work. However, while this may make financial sense, it can also leave families vulnerable should anything happen to that income earner."

Emily Devane gave up work as a teacher to look after her children, Kate, three, and Sam, one. Devane, who was a history teacher at a school in Hertfordshire, had returned part-time after having her daughter and had planned to do the same after Sam was born.

"I went back three days a week after Kate was born and that worked fine, but the fees at the nursery have gone up," she said. "I did the maths and I worked out I would be earning about £50 a week."

Devane's job meant a long commute and rising petrol costs, plus work after school hours. When Kate was offered three hours a day free of charge at a local pre-school, giving up work made even more sense. "I would have had to find a childminder who would have taken her to nursery and looked after Sam," she said. "It wasn't easy to make the decision – I think for women, particularly educated women, your work defines you. It was really difficult to give up." However, she added: "I could be earning very little money looking after other people's children or be here with my children, which for me seems the wiser decision at the moment."